Amid signs of rising festive and wedding demand for gold jewellery, the bullion discount to the landed price in the key cities of Mumbai and Ahmedabad plummeted to $1 an ounce (31.1 gms appx) on Friday from a steep $44 early last month, industry sources said.

Further, net bullion imports, which plunged 95% year on year to 11.6 tonnes in the June quarter, are expected to be much higher in Q3 , said jewellery retailer Kumar Jain of UT Zaveri in Mumbai’s famous Zaveri Bazaar gold market.

The pandemic-induced lockdown dragged down Q2 demand , but with restrictions easing steadily since then and many weddings deferred to the fourth quarter, jewellery demand is expected to improve in Q3 and Q4.

Kumar Jain said that sales at his store are estimated to be 60-70% of the previous festive year , corresponding to the December quarter.

Jewellery demand in India, which averaged 582 tonnes in the five years through 2019, plunged in the first half this year to 117.9 tonnes because of Covid’s impact on household budgets.

Jewellers say on this low base, an improvement is inevitable in H2 . Industry sources also feel that the share of organised players like Titan, Malabar and Kalyan Jewellers was bound to increase amid customer concerns over safety and reliability.